SECURITIES AND EXCHANGE COMMISSION v. PAUL J. SILVESTER, ET AL., (United States District Court for the District of Connecticut, No. 3:00CV1941 (EBB))

The Commission announced today that, on May 2, 2005, in a criminal case prosecuted by the Office of the United States Attorney in Connecticut, Ben F. Andrews, 65, of Simsbury, Connecticut, was sentenced to 30 months in prison followed by five years of supervised release. In addition, on May 23, Andrews was ordered to pay a fine of $250,000. The sentencing in the United States District Court in New Haven, Connecticut, followed Andrews's October 29, 2003 conviction by a federal jury on nine counts involving federal bribery, mail and wire fraud, conspiracy to launder money, and making false statements to federal agents.

Andrews's conviction stems from his receipt of a consulting contract worth $1.5 million, arranged by former State Treasurer Paul J. Silvester, in connection with the State of Connecticut's investment of $150 million of state pension assets in a private equity fund in 1998. Andrews was to receive half of the consulting fees generated by the investment, and had agreed with Silvester to share the remaining half with a close associate of Silvester. Evidence at trial showed that Andrews agreed to this arrangement, intending to influence Silvester's investment decision, and with knowledge that a portion of the consulting fees would be kicked back to Silvester.

The Commission filed a civil action in the United States District Court in Connecticut, in October 2000, charging Andrews, Silvester and nine others with securities fraud based on their involvement in the fraudulent kick-back scheme to invest state pension fund money. All but three of the defendants have previously settled with the Commission in that action. The Commission's case remains pending against Andrews, Charles Spadoni and Jerome Wilson. For further information, see Litigation Release Numbers 16759 (October 10, 2000), 16834 (December 19, 2000), 18436 (October 30, 2003), 18460 (November 17, 2003) and 18461 (November 17, 2003).